Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
HB-IWC
Topic Author
Posts: 4113
Joined: Fri Sep 22, 2000 1:09 am

AA B772 Operational Analysis

Wed Nov 29, 2006 11:53 pm

The largest airline in the world, American Airlines also operates one of the largest triple seven fleets. Second only to United Airlines (52 frames) but ahead of British Airways and Emirates (43 frames each), American currently operates a fleet of 47 virtually identically configured B777-200 aircraft. Yet unlike some of its main competitors, American operates these aircraft according to a rather intricate multi hub and spoke operational system, through which the airline’s flagship B777 aircraft constantly zips from one corner of the world to the other.


View Large View Medium
Click here for bigger photo!

Photo © Justin Wood - Woof Photography
View Large View Medium
Click here for bigger photo!

Photo © Gustavo Bertrán - Iberian Spotters



In this article, I plan to take an in depth look at American’s B777 operational models and compare them with those of some of its main competitors. This report is a further installment in a series of operational research topics, during which I earlier discussed KLM Longhaul Operations, Emirates Dubai Hub Performance, and, likely most relevant for the topic at hand, A Comparative Study of B777 Operations at BA, AF and KL.

The data used for this article are as up to date as possible. They pertain to the week of Monday, December 04 until Sunday, December 10. As airline operations are incredibly dynamic and changes are constantly undertaken, these data might no longer be accurate in a month from now, yet the overall picture is very likely to remain valid.



American Airlines B772 Network

No more than 17 airports in the world are currently seeing regularly scheduled B772 service by American Airlines. These airports are at Dallas (DFW), New York (JFK), Chicago (ORD), Miami (MIA), Los Angeles (LAX), Boston (BOS) and Raleigh Durham (RDU) within the United States as well as at London (LHR), Tokyo (NRT), Buenos Aires (EZE), again London (LGW), Sao Paulo (GRU), Frankfurt (FRA), Delhi (DEL), Shanghai (PVG), Rio de Janeiro (GIG) and Santo Domingo (SDQ) outside the airline’s home country.

Not all of these airports are equally important as to the B772 operation, and a close look at the following diagram gives somewhat of a better perspective on the status of each of the B772 stations within the airline’s operational system.


http://i110.photobucket.com/albums/n88/HB-IWC/AAOperations.jpg


Central Zone 1 – Operational Hub
Middle Zone 2 – Operational Periphery
Outer Zone 3 – Remote Stations

The central zone of the diagram depicts the B772’s core operational stronghold. All of the airports included in this zone act as operational hubs. Note that the term Operational Hub should not be confused with the traditional interpretation of an airline hub as an airport where passengers connect between flights. An operational hub may not offer any such connectivity and might merely serve as the end of a spoke in a traditional passenger hub and spoke model where the airline is attracting mainly O&D traffic.

The operational hub offers the airline – rather than the passenger – maximized degrees of freedom and flexibility in organizing its daily operation. The operational hub is able to do so because a multitude of flights operated by a particular aircraft type arrive and depart at the hub airport, allowing the airline flexibility in solving any operational irregularities that inevitably arise. Operational hubs are the territory of aircraft substitutions and, often, maintenance operations, as they allow for certain aircraft to be taken out of the active operation for a certain amount of time without causing a knock on effect within the airline’s network.

Many traditional network carriers structure their operation so as to include just one or two operational hubs, which are often the airline’s home base(s) and act at the same time as passenger and/or cargo hubs. American carriers, which have traditionally operated multiple hub systems, have often catered for a larger number of operational hubs in order to guarantee a stable operation, and American Airlines is no exception. Apart from the traditional suspects DFW, ORD, JFK and MIA, which also act as the airline’s main passenger hubs, American is also operating two of very few overseas operational hubs, at London’s Heathrow International Airport and at Tokyo’s Narita International Airport. As said, very few other such overseas operational hubs continue to exist: United and Northwest at Tokyo are other examples, as is Qantas at Singapore.

Just outside the central zone, with the airline’s core operational hubs, is the Operational Periphery. Airports located in this category are seeing a somewhat regular flow of scheduled B772 traffic, yet lack the flexibility to overcome operational instabilities should they occur because the potential for aircraft swaps is limited or non existent and there is often no possibility at all to take an aircraft out of the active operation for a while. Any irregularities occurring within the operational periphery will potentially ripple throughout the network, yet the vicinity of operational hubs makes that these irregularities can often be easily neutralized.

American Airlines’ operational periphery stations include LAX within the homeland as well as LGW, EZE, and GRU overseas. A thorough discussion of all of AA’s important B772 stations and their functions within the airline’s operational model will follow later.

Zone 3 in the above diagram, finally, represents the so called remote stations, where no operational flexibility, which has the potential of supporting the airline’s operational model in case of delays and other irregularities, whatsoever exists. Aircraft moving through remote stations often make immediate turnarounds with limited ground time so any instability which occurs at such stations is likely to have a knock on effect in the rest of the airline’s network. American Airlines operates remote B772 stations at BOS and RDU within the US and at FRA, PVG, DEL, GIG and SDQ outside of there.



American Airlines B772 Flights

American’s B772 operations take place within 4 different geographical sectors: Europe, Asia, South America and the US, in order of importance. On Mondays through Fridays, AA operates 17 B772 roundtrips between the US and Europe, 7 such roundtrips between the US and Asia, 5 roundtrips between the US and South America and 3 roundtrips within the US. Most of AA’s B772 flights are daily with very few changes in the weekend. SDQ is served just once weekly from BOS on Saturdays because on that day one of the airline’s Heathrow flights from BOS is not operating.

In order to operate the above flights, American Airlines commits 20 aircraft daily to its transatlantic operation, 10 aircraft to its South American operation, and 9 aircraft to its Asian operation. 3 aircraft daily are scheduled for an overnight stop at DFW, while 2 are doing so at ORD and 1 each at JFK and BOS. As such, the current American Airlines B772 Operation calls for 46 active frames out of a total fleet of 47. A more thorough discussion of the above numbers is to follow later.

Here is what AA’s entire B772 flight schedule currently looks like (all flights are daily, unless mentioned otherwise):


Europe

142 JFK LHR 0830 2025
100 JFK LHR 1815 0625
122 JFK LHR 1845 0655 – 5 weekly
104 JFK LHR 1935 0740
132 JFK LHR 2110 0905
116 JFK LHR 2345 1140
156 BOS LHR 0900 2030 – 6 weekly
108 BOS LHR 1910 0635
182 MIA LHR 1700 0625 – 2 weekly
056 MIA LHR 2020 0950
090 ORD LHR 0910 2235
086 ORD LHR 1715 0650
046 ORD LHR 2015 0945
098 ORD LHR 2150 1130
136 LAX LHR 1905 1325
050 DFW LGW 1705 0755
174 RDU LGW 1845 0700
070 DFW FRA 1440 0710

115 LHR JFK 0820 1105 – 6 weekly
101 LHR JFK 0955 1245
105 LHR JFK 1200 1445
131 LHR JFK 1635 1930
107 LHR JFK 1830 2125
141 LHR JFK 2000 2250 – 6 weekly
109 LHR BOS 1030 1255
155 LHR BOS 1755 2020 – 6 weekly
113 LHR MIA 0805 1250 – 2 weekly
057 LHR MIA 0945 1430
087 LHR ORD 1015 1255
067 LHR ORD 1215 1500
047 LHR ORD 1415 1700
091 LHR ORD 1630 1915
137 LHR LAX 1130 1450
051 LGW DFW 1025 1440
173 LGW RDU 1240 1615
071 FRA DFW 1030 1430


Asia

175 DFW NRT 1010 1445
061 DFW NRT 1205 1640
169 LAX NRT 1140 1640
153 ORD NRT 1105 1525
167 JFK NRT 1125 1545
292 ORD DEL 1920 2135
289 ORD PVG 1055 1525

176 NRT DFW 1325 0930
060 NRT DFW 1900 1515
170 NRT LAX 1700 0935
154 NRT ORD 1925 1545
168 NRT JFK 1905 1735
293 DEL ORD 0055 0515
288 PVG ORD 1745 1705


South America and Caribbean

955 JFK EZE 2210 1040
909 MIA EZE 2040 0720
943 MIA EZE 2320 1000
995 MIA GRU 2320 1020
951 JFK GRU 2130 1000
951 GRU GIG 1155 1255
2087 BOS SDQ 1105 1550 – 1 weekly

956 EZE JFK 2140 0610
900 EZE MIA 2155 0440
908 EZE MIA 2255 0540
906 GRU MIA 2350 0500
950 GIG GRU 2025 2140
950 GRU JFK 2330 0605
2084 SDQ BOS 1715 2005 – 1 weekly


Domestic

0436 DFW MIA 1750 2135
1945 MIA DFW 1620 1830

0066 DFW ORD 1330 1545
0067 ORD DFW 1700 1930

1520 LAX MIA 1205 1945
0383 MIA LAX 0815 1050



American Airlines B772 Operational Statistics

The above mentioned flight schedules call for the daily deployment of 46 of the airline’s 47 B772 frames throughout the network (details for Mondays through Fridays only, minor changes or Saturdays and Sundays) as follows:


  • a total of 20 frames are dedicated to the airline’s European transatlantic operation; these frames are to be counted as 17 roundtrip flights (14 LHR, 2 LGW, 1 FRA) plus 3 overnight spare frames, which are parked at London’s Heathrow airport because the late arrival times from the daylight eastbound sectors out of JFK, BOS and ORD preclude a same evening return to the US ;

  • a total of 9 frames are deployed in the Asia sectors for 5 roundtrips to NRT (5 frames), 1 roundtrip to DEL (2 frames accounting for a double overnight rotation), 1 roundtrip to PVG (1 frame) as well as one frame which is parked overnight at NRT ;

  • 10 further frames are deployed for the South American operation in order to secure just 5 roundtrip flights, as all of these flights require the investment of a double overnight rotation because of geographical considerations ;

  • a final 7 airframes are used for 3 daily roundtrips within the US as well as for overnight spare capacity at DFW (3 frames), ORD (2 frames), JFK (1 frame) and BOS (1 frame). The overnight spare capacity at ORD, JFK and BOS is a direct result of the airline’s early morning daylight transatlantic departures to London ;


All in all, the airline’s current B772 flight program calls for the active deployment of 46 out of a total of 47 frames, leaving space for heavy maintenance operations on the single remaining aircraft. The 46 active frames are however not so stretched in utilization as to preclude any incidental maintenance or overcome the inevitable operational issues: extensive ground times at several hub airports provides large levels of operational flexibility so as to make American’s B772 some of the more stable in the industry.

American Airlines includes a remarkably large amount of overnight spare capacity in its schedules. At any given night, no less than 11 active frames are parked in airports around the world. Obviously, the airline is using this spare capacity as a catalyst to stabilize its B772 operation so as to incur a minimum number of operational irregularities with its flagship aircraft, which is deployed in the airline’s highest yielding sectors. Nevertheless, 11 out of 46 overnight spares must be close to an industry record.

All of this spare capacity has, quite obviously an effect on the utilization rates of the AA B772 fleet, which are as follows (the numbers used are valid for weekdays only, yet there are only very minor changes on weekends):


B772 Daily Utilization Rates

Europe – 277 hours 20 minutes – 48.0% of total utilization
South America – 93 hours 20 minutes – 16.2% of total utilization
Asia – 181 hours – 31.3% of total utilization
Domestic – 25 hours 55 minutes – 4.5% of total utilization

Total Daily Utilization – 577 hours 35 minutes

Average Daily Utilization per frame – 12 hours 17 minutes


American’s average daily utilization rates are remarkably low for today’s industry standards. Obviously, the relatively large number of overnight inactive frames plays a major role in this low utilization rates. The airline likely has very cogent arguments for parking these frames overnight, and one should not forget that the B772 is AA’s flagship aircraft, which carries by far the greatest number of premium seats in the entire AA fleet. As such, the airline likely puts a premium on commercially viable scheduling, despite its pernicious effect on utilization rates.

Other elements that might account for part of the low utilization rates are slot restrictions at such airports as LHR, LGW and NRT as well as the fact that American is operating a multi hub and spoke model which typically leads to lower utilization rates than those achieved at single hub operators. The geographical location of the South America region relative to the airline’s passenger hubs, finally, has a negative impact on utilization rates as well, as the airline parks its aircraft for extensive periods of time at certain South American airports in order to cater for overnight flights. A further discussion of utilization rates and a comparison with some of AA’s main competitors is to follow later.

A comparison of total investment of frames per sector and relative share of the total utilization for each of those sectors gives the following result:





The data above indicate that the airline’s Asia Operations are by far the most efficiently organized with a relatively high utilization rate compared to the relative number of airframes invested in this sector. The reason for this efficiency is of course the fact that, at American, ground times in Asia are typically shorter, with immediate turnarounds in most cases and just one overnight spare parked at NRT.

The South American operation, on the other hand, turns out to be the least efficient with a relatively large investment of frames but a lower return on utilization. The main reason for this seemingly unfavorable picture is the earlier mentioned long ground time at South American airports, which are a typical annoyance for many longhaul North-South operations.

The unfavorable position of the domestic component in these data is of course skewed by the fact that the airline’s main operational hubs are located in this area and that the airline caters for operational stability by parking a number of frames at key airports, which do contribute to the frame count but have no contribution at all to the utilization count.



Operational Characteristics of American Airlines B772 Stations

In order to get a better insight in the exact flow of aircraft through the airline’s operational model, a somewhat closer look at each of the most important B772 stations – both Operational Hubs and Operational Periphery Stations – is necessary.





DFW – Dallas Fort Worth International Airport

Operational Characteristics:

Movements: 12
Overnight Spares: 3
Average Ground Time: 10 hours 54

DFW is American Airlines’ home base, and although it does not see as many B772 movements as some other stations in the network, it is arguably the airline’s most important B772 hub. The schedule at DFW is set up with a lot of flexibility as no less than 3 inbound flights are not scheduled for a departure on the same day. The above diagram illustrates one of many operational patterns, although three overnight stopovers are absolutely necessary to keep this schedule operational.

As this airport is an important maintenance base for the B772 fleet, it is within the line of expectations to see the airline scheduling the kind of flexibility and ground time apparent in the current operational setup. DFW is working as a stabilizing factor in the airline’s B772 operation and it is also used as a hub to recall certain frames to the home base through domestic links to both ORD and MIA, which serve no other purpose than to guarantee adequate flow of aircraft through the system, while positioning other frames at both ORD and MIA.


JFK – New York John F Kennedy International Airport

Operational Characteristics:

Movements: 18
Overnight Spares: 1
Average Ground Time: 6 hours 29

New York JFK is an Operational Hub for American’s B772 operation. Although it is mainly linked to London Heathrow, it features sufficient operational flexibility to cater for aircraft substitutions in case of irregularities. One aircraft is parked overnight at JFK because the last Heathrow arrival of the day is too late for this aircraft to still be scheduled for another departure. The above diagram indicates a typical flow of aircraft through JFK, although several alternative options exist.

New York JFK is not linked to any of the airline’s other domestic operational hubs, and aircraft flow between JFK and those hubs, in particular DFW, through international hubs. This is a typical phenomenon for multi hub and spoke networks of international airlines: certain cities may only be linked to the airline’s home base by way of international intermediate stations. Within the AA B772 setup, for instance, the RDU station is fed through LGW only.





ORD – Chicago O’Hare International Airport

Operational Characteristics:

Movements: 16
Overnight Spares: 2
Average Ground Time: 7 hours 06

Another Operational Hub, Chicago O’Hare plays a major role in American’s international operations, with daily B772 departures to Europe and Asia, as well as a daily positioning flight to and from the DFW home base in order to inject new equipment into the system. Some of the airline’s longest flights are leaving from this airport and when considering the strength of the airline’s domestic feed at ORD, it is absolutely clear that this airport is a key element in American’s operational model.

American keeps two overnight spares available at ORD and links the airport to many parts of the B772 network, allowing for both optimal flow of airframes through the operational system as well as a beneficial impact of the airline’s operational stability.


MIA – Miami International Airport

Operational Characteristics:

Movements: 12
Overnight Spares: 0
Average Ground Time: 7 hours 28

Miami is American Airlines’ most important gateway to South America, and the airport features three daily B772 departures to that region. Because of the geographical location of South American airports and the perceived preference of premium passengers for overnight longhaul flights, all of American’s B772 departures to that region operate according to a double overnight operational pattern, which typically includes a long ground time at the outstations, in AA’s case GRU and EZE. Flights return very early in the morning and face again long ground times because no departure schedules are immediately available.

In order to somehow make good use of the parked airframes, American is operating a daily LAX roundtrip with its B772 aircraft. Otherwise the aircraft would anyway just be sitting in MIA. The airline has the operational potential to operate other such domestic or regional roundtrip, but apparently does not find any beneficial use for doing so.

The above included flow chart indicates a typical traffic flow at MIA, although, considering the long ground times of certain frames, a lot of alternative options exist. Obviously, the long ground times work as a stabilizing factor, keeping the operation relatively free from knock on delays, yet have a negative effect on the airline’s utilization rates.





LAX – Los Angeles International Airport and BOS – Boston Logan International Airport

Operational Characteristics LAX:

Movements: 6
Overnight Spares: 0
Average Ground Time: 2 hours 31


Operational Characteristics BOS:

Movements: 4
Overnight Spares: 1
Average Ground Time: 7 hours 30

LAX and BOS are airports located in the operational periphery and the operational remote area for the B772 operation respectively, as indicated by the smaller number of movements here, which do not cater for a lot of flexibility in terms of eliminating effects of operational irregularities. At LAX, all of American’s three daily flights make immediate returns to the airport of origin, while BOS is only linked to London Heathrow on workdays (Boston’s SDQ connection operates only on Saturday when the daylight Heathrow departure doesn’t operate) and as such has no direct link with any of the airline’s domestic operational hubs. BOS has nevertheless one overnight spare aircraft, which arrives late in the evening from LHR and is deployed again the next morning for the daylight Heathrow departure.





LHR – London Heathrow International Airport

Operational Characteristics:

Movements: 28
Overnight Spares: 3
Average Ground Time: 6 hours 56

Although located outside the airline’s home country, London Heathrow is American’s Operational Hub which features maximum flexibility and allows for lots of aircraft changes and substitutions, thus minimizing any disruptions to the operational model. LHR thanks its status not only to the large number of flights there, but also to the slot restrictions the airline is without any doubt facing and which might preclude it from scheduling its flights with shorter ground times. This somewhat increased ground time of airframes passing here allows for increased flexibility in dealing with delays and other irregularities.

American Airlines keeps 3 frames parked overnight at Heathrow, because they arrive too late from daylight transatlantic flights from JFK, ORD and BOS, to still be scheduled for an evening departure. LHR is without any doubt one of American’s highest yielding stations and the airline can afford to lose somewhat on utilization in favor of commercially viable schedules and frequencies.

Above is a typical overview of an American Airlines operational day at Heathrow, although many alternatives are feasible. As a matter of fact, the operation at LHR is so flexible that, in case of technical issues with one of the aircraft, AA can keep this frame on the ground at LHR for several days without canceling a single flight and without other severe irregularities in its operational setup.


NRT – Tokyo Narita International Airport

Operational Characteristics:

Movements: 10
Overnight Spares: 1
Average Ground Time: 6 hours 32

Apart from LHR, American Airlines also operates an Operational Hub at Tokyo’s Narita International Airport, and although the airline has recently reduced flights to NRT with the closure of its San Jose connection, the airport keeps its operational hub status and has the potential to mitigate operational irregularities through aircraft substitutions and other operational flexibility.

The above diagram clearly indicates the need for an overnight spare frame to be parked at NRT, and also shows how the aircraft typically flow through this operational hub, although several variations are possible.


Other B772 Stations

Operations at other B772 are far less extensive as those at some of the airports described above and offer very little, if any flexibility to the airline in terms of mollifying the effects of operational irregularities. Frankfurt, Delhi, Shanghai, for instance, are remote stations with a single daily flight linked to one of the airline’s operational hubs, and feature an immediate turnaround of the inbound frame.

London Gatwick, although in the operational periphery, receives but two daily flights and acts as a intermediate point in feeding Raleigh Durham from Dallas. Although the airport has the option of interchanging its two daily flight, its effect on the rest of the B772 network is relatively minimal.

In South America, both Sao Paulo and Buenos Aires are located within the operational periphery, but since ground times in South America are, for geographical reasons, very extensive, there is very little interaction with the rest of the worldwide B772 operation. Both GRU and EZE act, however, as buffers in absorbing in inbound delays through extensive ground time.



Analysis and Personal Comments

Any operational analyst looking at some of the numbers mentioned above and analyzing American Airlines’ B772 Operation is likely to be struck by the relatively low utilization rates of this flagship fleet of 47 aircraft. Indeed, a utilization rate of just 12 hours and 17 minutes per day is low by any of today’s industry standard, as is obvious from the following comparison of operational statistics of a couple of major B777 operators around the world, the details of which may be found in this article.





The main reasons for the relatively low utilization rates have been discussed before and are mainly to be linked with extensive scheduled ground times and the provision of 11 overnight operational spares for a fleet of 47 aircraft. Nevertheless, American Airlines has likely very compelling arguments for keeping the utilization rates at the levels they currently are:


  • the B772 (configuration 16F/35C/194Y or 18F/35C/194Y) is the airline’s most premium aircraft, with a particularly large number of very high yielding International First Class seats. In order to attract the kind of traffic to fill these seats, the airline has to make every effort possible to cater to the needs of its premium customers. As such, American schedules its flight according to commercially viable patterns, which include a maximum of overnight sectors, even where other alternatives exist. Such commercial scheduling, while beneficial for attracting premium traffic and as such impacting the company’s bottom line positively, tends to have a deteriorating effect on utilization rates, because the airline faces longer ground times at outstations than operationally necessary. Nevertheless, the airline has likely quantified that the negative effect on the utilization rates is outstripped by the benefit of attracting additional premium traffic;

  • American Airlines seemingly puts a premium on keeping its operation stable. Operational issues are inevitable and delays will occur, but the airline’s schedule clearly indicates its desire to minimize network wide effects of operational irregularities. As it goes, most stations in the B772 network have the operational tools to neutralize any irregularities, and those stations that don’t have these provisions are directly linked to other stations which have such tools and provisions so that any negative effects can be mitigated the furthest one step down the operational system. Very few airlines feature an operational setup which is so clearly designed to immediately overcome instabilities as the one of American Airlines. As such, other airlines may have to cope with knock on effects of previous delays which may ripple through the system for several days. It is clear that the AA model is once again designed from a perspective of pleasing its most valued customers with a very stable operation, which is relatively insensitive to delays. The airline seems to be more than willing to invest in a stable operation through a utilization pay off;

  • the American Airlines B772 operation routes through some of the world’s busiest airports and many of these airports are severely congested and slot restricted. Congestion may lead to undesirable delays, which should be eliminated as soon as possible, and for which American organizes a system of extended ground times and overnight spare capacity as discussed before. Slot restrictions, on the other hand, might force the airline into schedules which are less desirable from an operational perspective and which might further eat into the airline’s utilization rate. Yet the advantage of operating into such premium airports is obvious: the airline is able to attract larger amounts of higher yielding traffic and should compromise on any operational annoyances for the sake of being able to operate there;

  • unlike many of its non-US rivals, American Airlines operates a multi hub and spoke operational system, which tends to spread out the airline’s operational resources of multiple geographically separate locations. This spreading of resources and operational bases, which necessitates the provision of minimum operational flexibility at each of those bases, has a deteriorating effect on utilization rates. Yet, the United States is a very large country and although there has been a move to close smaller hub operations over the past decade or so, there is a limit as to the number of passenger hubs an airline can reduce itself without losing essential business and negatively impacting its bottom line. As it goes, there is really no further rationalization American Airlines could possibly undertake in the number of passenger hubs it operates. The airline may try to move away B772 operations from smaller stations, but the beneficial effect of such an move is likely very limited;


It is as such clear that the operational setup of the American Airlines B772 Operation has been very well considered and that the limited utilization rate is a clear decision by the airline with its ultimate goal to attract premium traffic and keep the operation as stable and free from irregularities as possible.

The question remains, however, as to any potential ways of improving utilization rates without compromising the balances that have been carefully included in the current operational setup. I believe increased utilization is indeed possible without negatively impacting any of the sensitivities which are obviously important for the airline. The question is then, obviously, whether American Airlines is interested in adding such utilization. Considerations of yield management and protection of yields may very well preclude the addition of capacity to certain of American’s core routes.

The perception that American’s B772 fleet is stretched to the absolute limit – an observation that has repeatedly arisen in here – is however no more than a myth. When taken at face value, utilization rates are low, full stop. It is only when factoring in some of the boundary conditions which the airline has been imposing on itself that the B772 operation gives the impression of being packed. Many of the limitations which American Airlines has been setting are obviously valuable and serve a clear purpose, yet it is clear that the airline is somewhat under-using its 47-strong B772 fleet. Whether this is the optimum situation in terms of optimal utilization of available resources in terms of effect on the company’s bottom line is a decision which only the airline can make.
 
AFC_Ajax00
Posts: 739
Joined: Tue Nov 21, 2000 5:33 am

RE: AA B772 Operational Analysis

Wed Nov 29, 2006 11:59 pm

Very interesting read! I'm now going ahead and reading your other articles!
Once you have tasted flight, you will walk the earth with your eyes turned skyward; for there you long to return
 
gigneil
Posts: 14133
Joined: Fri Nov 08, 2002 10:25 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:08 am

Just a quick point- Singapore currently operates the largest fleet of 777s in the world, not United. American comes in 3rd.

NS
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:20 am

HB-IWC....some great stuff there!

Flying on AA every few weeks, I follow AA's 777's routes quite extensively..

You have nailed a lot of things on the ball...

Thanks for your work..


One thing which comes to mind (which you have mentioned in an indirect way)..this schedule is for the winter/spring season.

During the summer months, AA adds an additional LAX/ORD-LHR frequency (don't know about the other cities though)..

That being said, I think there is some room for optimisations with their 777's.

I've flown to LHR (primarily) from ORD a number of times, and I've seen a few empty seats occasionally.

I know the 767 wouldn't provide the travel classes AA's high-yielding pax want..but maybe if they get some 787's, they would be able to run a 787/777 mix at LHR...even until 2002, AA was running their A300's over the pond..so it is possible..

One thing which I'm curious about is the amount of cargo from each of these locations..I would assume MIA-South America sees a sizable cargo operation..

Regardless..some really good work done there..and I must commend you on it..

Cheers

edited for spelling...

[Edited 2006-11-29 16:22:49]
"Up the Irons!"
 
JMO-777
Posts: 463
Joined: Wed Apr 24, 2002 9:51 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:22 am

Hey HB-IWC,

congratulations to a very interesting report.

GreetZ,
Jan
~~~ Fly with a Triple Seven and you feel like in heaven ~~~
 
CHRISBA777ER
Posts: 3715
Joined: Thu Mar 01, 2001 12:12 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:27 am

Good stuff - interesting read. Well done.
What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:28 am

Interesting read - thanks for all the effort.

Quoting HB-IWC (Thread starter):
American’s average daily utilization rates are remarkably low for today’s industry standards. Obviously, the relatively large number of overnight inactive frames plays a major role in this low utilization rates. The airline likely has very cogent arguments for parking these frames overnight

On the point about low aircraft utilization, it's true, American doesn't use its 777s nearly as intensively as others when compare just straight daily hours in the air.

This is because American, way back in 1999 when they put their first 777s into service, made the decision that they would rather utilize the 777s less and keep them for a lot longer. As such, American has never really pushed their 777 fleet as hard as other airlines, keeping their airframes' cumulative hours and cyles relatively low, because they anticipate flying these birds for well over 30 years.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:41 am

Quoting Commavia (Reply 6):
This is because American, way back in 1999 when they put their first 777s into service, made the decision that they would rather utilize the 777s less and keep them for a lot longer. As such, American has never really pushed their 777 fleet as hard as other airlines, keeping their airframes' cumulative hours and cyles relatively low, because they anticipate flying these birds for well over 30 years.

Which could put them at a disadvantage as no one knew back in 1999 that a plane called "787" would be coming out a decade later....granted, the 787-10 which would be the proper 777-200ER replacement won't be coming out for a while..

That being said, AA does have the largest fleet of gas guzzlers in the world and they are still making profits...

Also, resale value would be quite decent, as the planes have low cycles.
"Up the Irons!"
 
UAL777UK
Posts: 2370
Joined: Sun Nov 20, 2005 1:16 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:46 am

Can you run all that past me again.....only joking...a great report well done.
 
UN_B732
Posts: 3532
Joined: Wed Jul 04, 2001 12:57 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 1:05 am

HB-IWC - I never cease to be impressed by your analysis of airline operations.
This, like the others, is top notch. Thank you for your good work for this forum.
What now?
 
User avatar
fxramper
Posts: 5839
Joined: Sun Dec 04, 2005 12:03 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 1:12 am

If your not already, you should be working in the airline industry with a fleet manager position. Excellent report. My uncle is a Sr International Captain with AA and I forwarded this excellent read to him. I'm sure he'll pass it along to a few other guys at AA.

Quoting Commavia (Reply 6):
This is because American, way back in 1999 when they put their first 777s into service, made the decision that they would rather utilize the 777s less and keep them for a lot longer. As such, American has never really pushed their 777 fleet as hard as other airlines, keeping their airframes cumulative hours and cycles relatively low, because they anticipate flying these birds for well over 30 years.

 checkmark   checkmark   checkmark 

Again, excellent detailed analysis.
 
bpat777
Posts: 705
Joined: Sun Nov 28, 1999 8:21 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 1:17 am

Thanks for the report. It was a very informative and interesting.
 
HB-IWC
Topic Author
Posts: 4113
Joined: Fri Sep 22, 2000 1:09 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 2:22 am

Quoting Jacobin777 (Reply 3):
During the summer months, AA adds an additional LAX/ORD-LHR frequency (don't know about the other cities though)..

I would imagine that American is operating a reinforced schedule during the height of summer travel, and, as discussed in the original post, there is plenty of room for adding utilization, so a couple of additional flights are certainly not out of the range of possibilities.
 
Gnomon
Posts: 894
Joined: Thu Jun 03, 1999 12:38 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 3:05 am

What an interesting and salient report! Thanks so much for this contribution to the forum.

I have a question similar to one I've asked in the past about UA's 777 operations:

What's the MGTOW of AA's 772ERs?

Several sources indicate 648k pounds, including this SEC filing from 2002 (in respect of a particular airframe -- N786AN).

But I have a hard time imagining the ORD-DEL (and -PVG) services operating profitably with the lower 648k-pound MGTOW. This begs the question of whether none, some, or all of AA 772ERs have the uprated 656k MGTOW, which probably wouldn't be as useful for BOS-LHR as it would for ORD and DFW to Asia.

Thanks again for the informative post.
 
M27
Posts: 409
Joined: Mon Oct 04, 2004 11:25 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 3:23 am

HB-IWC

Wonderful report! I enjoyed it very much! I have a question about the daily utilization. Do you have any information about yearly utilization on any of the airlines? In other words, are the figures you give for daily use already factored for 365 days a year counting in the days an aircraft is not used due to scheduled checks, maintenance, etc? If not, do you have info as to the number of days an aircraft on average may be down per year for these activities?

Thanks again for the posting and for any info you may have above!
 
Tan Flyr
Posts: 1736
Joined: Sat Aug 19, 2000 11:07 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 6:36 am

Great report..Thanks for your outstanding effort!
 
bnatraveler
Posts: 396
Joined: Tue Dec 02, 2003 10:10 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 8:04 am

HB-IWC

Wonderful report! I've followed your BA, KL and AF reports and this is a great add-on.

I'd be very interested to see a report on CO -- not just on their B772 fleet, but with their B762 and B764 fleet mixed in. Everyone on here reports that their widebody fleet is stretched as thin as possible and I'd be interested to see just how thin that is!

Thanks again for an incredible report.
 
jfk777
Posts: 7470
Joined: Tue Aug 22, 2006 7:23 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 9:48 am

Very informative on AA 777's. Its almost like the 777 are a separate premuim department within AA. All LHR flights 777, who else can say that. Given the routes they fly with the slot and geographic restrictions AA has taken the number of routes flown by the 777 as far as it can go. The flexibilty to absorb delays is the central management issue, the way they do that is facinating. Bravo AA.
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 10:01 am

good job.

I'm not sure about AA's decision to keep hours down but I would not think it to be wise given the 787 series that will probably push 777 resale values down once a sufficient number of 787s hit the market.

As for utilization, AA's use of the 777 is depressed because of the number of S. American and LHR daylight flights the 777 is used on. But the 777 is very capable of operating at much higher utilizations and still being very reliable; I don't buy that AA underutilizes its 777 fleet to keep operations reliable - the 777 has one of the highest dispatch reliabilities of any aircraft.

finally, I know people here will argue with me but I still think the 777ER is an overweight and overcapable aircraft for most US to western Europe routes. The issue is not that AA makes money on its 777 Europe routes but that it could make more w/ a better matched aircraft and it could add more Asian routes if it replaced the 777 w/ a less capable aircraft where the 777ER's capabilities are not needed. The 764 and A333 are roughly comparable in terms of seating capacity (+/- ~30 seats) to the 772 but weigh alot less. Even the 772 (non ER) is capable of doing most AA 777 flights to Europe and S. America (such as UA uses their 772s) but w/ less fuel burn due to the lower thrust engines. The 787-9 or 10 is the best candidate to replace AAs 777s in another 5-10 years, some of which could be used for additional Asian growth where the 777 is best suited in terms of weight and economics.
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 10:40 am

Quoting WorldTraveler (Reply 18):
I'm not sure about AA's decision to keep hours down but I would not think it to be wise given the 787 series that will probably push 777 resale values down once a sufficient number of 787s hit the market.

It has nothing to do with resale value -- AA doesn't factor resale value 40 years into the future into its fleet planning. It's about keeping hours and cycles down so the planes can be flown reliably for years and years to come.

Quoting WorldTraveler (Reply 18):
I don't buy that AA underutilizes its 777 fleet to keep operations reliable - the 777 has one of the highest dispatch reliabilities of any aircraft.

Again, it's not about reliability now -- it's about their reliability 20-30 years from now, when these planes are aging. At that time, keeping their cycles low will be economically beneficial.
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 10:53 am

The 772ER will not be an economically viable airplane 15 years from now. That is the point. If AA is intentionally under utilizing their aircraft in the light of new technology (the 787) that will overshadow the 777, they are making a mistake.

there is no evidence that an older aircraft is less reliable if it has been properly maintained. Widebody aircraft esp. are usually retired close to the time they are depreciated at 20 years for most US airlines because the overhaul costs become so expensive, not because they are unreliable. As I said, the 777 is one of the most reliable aircraft in the world; to think it will all of a sudden start falling apart in 5-10 years of heavy use is just not logical or defensible. Even when reliability starts suffering on older aircraft, the usual approach is to pull back on the usage as the aircraft ages, not to keep it artificially low at the beginning of its life when it is most reliable and most technologically competitive.

The numbers are interesting in the report but I'm not sure I believe the rationale behind the numbers. And if AA does in fact operate that way w/ the 777, they are doing completely opposite of what other carriers are doing - and opposite of what AA is doing w/ the rest of their airline.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 11:24 am

Quoting WorldTraveler (Reply 20):
The 772ER will not be an economically viable airplane 15 years from now.

Sure it will...it might make less margins from a comparative plane such as the 787-10..but that's not to say if AA flies the 777's it will lose money....
"Up the Irons!"
 
MGASJO
Posts: 357
Joined: Sat Feb 12, 2005 9:37 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:07 pm

Quoting WorldTraveler (Reply 18):
The issue is not that AA makes money on its 777 Europe routes but that it could make more w/ a better matched aircraft and it could add more Asian routes if it replaced the 777 w/ a less capable aircraft where the 777ER's capabilities are not needed. The 764 and A333 are roughly comparable in terms of seating capacity (+/- ~30 seats) to the 772 but weigh alot less. Even the 772 (non ER) is capable of doing most AA 777 flights to Europe and S. America (such as UA uses their 772s) but w/ less fuel burn due to the lower thrust engines. The 787-9 or 10 is the best candidate to replace AAs 777s in another 5-10 years, some of which could be used for additional Asian growth where the 777 is best suited in terms of weight and economics.

This would fall totally out of AA's fleet simplification program. By having a non-ER spare available for a route that requires an ER on the case that the ER goes Out of service you will an extensive delay waiting for an aicraft able to make the trip.
Endless Reserve
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 12:23 pm

I'm not proposing that AA have nonERs. I'm simply saying that a nonER could do what AA is using half of the routes that AA has its ER fleet doing.

of course it can still make some money but remember that the demise of 3 holers came as more efficient technology made it impossible to make money w/ those older technology aircraft. if other competitors are using new technology aircraft and price their product based on their ability to make profits w/ those new generation aircraft, an airline that is using new technology aircraft cannot make money. we have seen that time and time again over the past decade and it will only get more acute now that fuel is much higher than it was when the 777 was designed and put in service.

and technologically dated aircraft or any other equipment do not have respectable resale values.
 
worldjet777
Posts: 131
Joined: Sun Oct 23, 2005 4:07 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 2:07 pm

Thank you for the excellent analysis, I fly AA alot being based in Dallas, and I love the 777 service that heads our way. Your report really makes sense of it!

Cheers,
wj777
Now Your Flying Smart
 
kaitak744
Posts: 2230
Joined: Fri Jul 22, 2005 1:32 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 2:33 pm

AA will be receiving 1 777-200ER from Boeing very soon (the one which they leased to Boeing for testing). Where will this fall into the schedule?
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 2:36 pm

Quoting Kaitak744 (Reply 25):
AA will be receiving 1 777-200ER from Boeing very soon (the one which they leased to Boeing for testing). Where will this fall into the schedule?

AA currently has 44 Boeing 777s flying in daily rotation, with a single plane on lease to Boeing that will be returning to the company -- barring any extension of the lease from Boeing -- by next month. That will make number 45.
 
kaitak744
Posts: 2230
Joined: Fri Jul 22, 2005 1:32 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 2:57 pm

Quoting Commavia (Reply 26):
AA currently has 44 Boeing 777s flying in daily rotation, with a single plane on lease to Boeing that will be returning to the company -- barring any extension of the lease from Boeing -- by next month. That will make number 45.

HG-IWC just stated that there are currently 46 in active service with 1 spare.

Quoting HB-IWC (Thread starter):
All in all, the airline’s current B772 flight program calls for the active deployment of 46 out of a total of 47 frames, leaving space for heavy maintenance operations on the single remaining aircraft.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 4:08 pm

Quoting WorldTraveler (Reply 23):
of course it can still make some money but remember that the demise of 3 holers came as more efficient technology made it impossible to make money w/ those older technology aircraft. if other competitors are using new technology aircraft and price their product based on their ability to make profits w/ those new generation aircraft, an airline that is using new technology aircraft cannot make money. we have seen that time and time again over the past decade and it will only get more acute now that fuel is much higher than it was when the 777 was designed and put in service.

In theory you might be correct..but last I remembered, AA has the largest MadDog fleet in the world and still making net profits...
"Up the Irons!"
 
Carpethead
Posts: 2620
Joined: Mon Aug 02, 2004 8:15 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 5:36 pm

Great analysis.
I concur with your NRT analysis because AA's turnaround times are not the usual two hours but more to take into account delays (which happens time to time) from the inbound US flights. The aircraft that parks up overnight at NRT also isn't always necessarily the last flight into NRT that day. I have often seen the third or fourth aircraft being towed to the remote ramps, so long as the last flight in can make it out for the last flight out.

Except for changing the flying patterns on the South American routes or using an aircraft or too that sit on the ground at MIA for domestic ops, AA's 777 fleet is utilized effectively.

If anyone wants to see an under-utilized (from a flight hours perspective) fleet of 777s, check out the ones at NH or JL.
 
thunder9
Posts: 175
Joined: Sat Jul 12, 2003 8:02 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 6:12 pm

Quoting Kaitak744 (Reply 27):
Quoting Commavia (Reply 26):
AA currently has 44 Boeing 777s flying in daily rotation, with a single plane on lease to Boeing that will be returning to the company -- barring any extension of the lease from Boeing -- by next month. That will make number 45.

HG-IWC just stated that there are currently 46 in active service with 1 spare.

FYI all...As of 0600CST 28 Nov 2006, AA has 27 T7's configured 16/35/194, and 19 T7's configured 18/35/194, for a grand total of 46 frames. This includes all "spares" which is a bit of a misnomer, as AA doesn't have aircraft that can really be called spares. If a jet goes OTS, the equipment desk will move up another aircraft to cover that trip.

-J
"Keep thy airspeed up, less the earth come from below and smite thee." - William Kershner
 
baw716
Posts: 1463
Joined: Thu Nov 20, 2003 7:02 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 6:16 pm

HB-IWC

First, I'd like to say that as a former airline analyst, your analysis of AA's scheduled use of their 777 aircraft is quite interesting. I do not agree with your premise, however, that AAs B777 utilization being at maximum is a myth; there is data missing to arrive at that conclusion. You may well be correct; however, there are aspects of their operation that I did not see in your analysis and I'd appreciate a comment or two on the following points:

Actual aircraft rotation data was not present in your analysis. You used only schedule data to arrive at your conclusions. At AA, an aircraft could fly DFW-NRT-DFW-LGW-ORD-LHR-MIA-GRU... (you get the point) in a given time frame. I do not know if AA schedules their aircraft in weekly hours or monthly hours. Also, during overnights, specific maintenance checks are done at certain times and stations. If someone at AA could give you an actual historical rotation for a certain percentage of their 777 aircraft, you might be able to fine tune your analysis to arrive at "sample of actual utilization vs. schedule utilization". In a multi hub system in which AA operates its 777 fleet, the likelihood that the aircraft will go from one end of the world to the other and back is quite likely.

AA is multi hub oriented, therefore, aircraft utilization is affected by scheduling to achieve an arrival/departure during a peak bank. Maximizing connections in a hub oriented system (yield management is critically tied to this) is a substantial factor in aircraft scheduling. AA has a distinct advantage, given that it has multiple cities which are strong hubs for both point to point and connecting traffic.

Let's use South America as an example. Most carriers who fly to South America have a significant amount of aircraft ground time at the out station. This is due to scheduling designed to maximize connections at the hubs. MIA-South America flying is a good case in point. Most flights to the deep south leave late at night and arrive in GRU in the AM, then the aircraft sits until late at night and returns to catch the AM bank in MIA or JFK (according to your model).

There is another consideration: What yield are they getting per sector to South America? If there is a substantial premium on yield on a unit basis on those sectors sufficient to cover the cost of the aircraft sitting on the ground for 14 hours, then an argument could be made that AAs 777 aircraft are maxed out, since to rearrange the schedule could have a negative impact on unit margin and the object of the exercise is to achieve a positive unit margin on each individual flight sector. Conventional wisdom is that an aircraft on the ground does not make money. However, if the route makes substantially high unit margin, why change the schedule to gain more hours? Can you gain enough additional hours to justify the unit margin loss because of the change in schedule? I haven't done an analysis lately, but I believe fares to deep South America are quite high (on a unit basis), especially in the premium cabins, especially compared to AAs Asia routes.

My opinion is that AA schedules their aircraft to maximize connections at the hubs and as a result, utilization will be lower than in a point to point operation, in which connecting traffic is not a significant factor in scheduling. It is therefore possible based on these factors that AAs 777 operation may be operating at close to peak capacity. However, since we don't have actual aircraft rotation information, it is difficult to come to a clear conclusion.

What is clear is that you have done a substantial amount of work and you should be congratulated for your effort. To post such an effort on this forum takes a lot of courage, as there will be people who will question your conclusions, as I have. However, you should not take this as negative criticism of your work. You make interesting points that generate a lot of questions, and good analysis should do that. The question I find most interesting: Is AA's current 777 utilization based on hub oriented flying the most profitable use of that aircraft for them?

My closing thought is that there are multiple dynamics at work in aircraft/route scheduling and it takes a very delicate balance of disciplines to get it right. It has been my experience (competing against AA) that AA does an excellent job in this regard.

regards,
baw716
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
 
tmamtrak
Posts: 16
Joined: Wed Nov 22, 2006 7:38 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 6:51 pm

Fascinating read... thank you for posting. I've now also read your other reports... thanks again!  Smile
 
raggi
Posts: 886
Joined: Mon Oct 23, 2000 4:34 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 7:11 pm

Quoting Gnomon (Reply 13):
What's the MGTOW of AA's 772ERs?

I believe they are 648Klbs, although I am not sure.

Does anyone know for sure what the MTOW is for AA's 777s? Are they pimped to 656Klbs, like DL did just recently for the DEL route?

Oh, and HB-IWC, GREAT analysis. Again. Hats off!


raggi
Stick & Rudder
 
karan69
Posts: 2729
Joined: Mon Oct 04, 2004 7:57 pm

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 8:01 pm

Great read, thanks for a very interesting analysis.

I have one question though----If and when they do plan to launch additional 777 flights to PEK/BOM [Asian cities] from either ORD or LAX---how would this effect the airlines schedules---- assuming pending further 772 deliveries and route permission are granted.

Karan
 
HB-IWC
Topic Author
Posts: 4113
Joined: Fri Sep 22, 2000 1:09 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 8:29 pm

Quoting BAW716 (Reply 31):

BAW716, thank you very much for taking the time to extensively reply to my short article. The above article is actually a small part of a much more extensive research topic, in which I am trying to set up a mathematical model that accurately quantifies a multi hub and spoke model as it used by American Airlines. In a later stage, I would like to extend this model into an algorithm for optimizing aircraft utilization and scheduling given a large set of parameters.

I have put an excerpt of my data and findings on this forum, not only to gauge reaction of the community, but also because I believe that more articles of this type should be published and discussed here. I have obviously omitted any confidential information but also all mathematical modeling, pertaining to statistics and calculus, because this forum is not the right place engage into a discussion of the mathematics behind the data.

My statement about the perception that the utilization of AA's B772 fleet is at maximum levels is a myth should be seen in the context of a comparison of the absolute utilization of the fleet when compared to the utilization rates of competitors. When looking at the raw numbers, utilization is indeed low. However, I also stated that AA likely has very cogent arguments to keep its utilization at the levels they currently are.

Indeed, it is clear from my research that AA puts a premium on commercially viable scheduling. That is, American not only makes optimal use of its multi hub operational system by maximizing connectivity there, but also tries to schedule longhaul flights anyway according to what are perceived as commercially interesting schedules for attracting premium traffic. Obviously, putting such a premium on commercial scheduling, has a deteriorating effect on the utilization rates. I am in now way condemning AA for doing so, because, as it turns out, the cost of the penalty in utilization rates is likely more than compensated by the additional premium traffic that the airline is able to attract.

I see American's drive toward attracting premium traffic - the B772 being the airline's most premium aircraft - as the main driving force behind the current structure of the schedule and hence the utilization rates. However, other determinants include specific airport related operational issues (slot restrictions, congestion, curfews and others), the inevitable loss in efficiency and need for additional resources because of the operation of a multi hub operational model, and the airline's commitment to keep its B772 operation as stable as possible by scheduling sufficient operational spare capacity.

So, while my text indeed reads that the peak utilization of AA's B772 fleet is a myth and that additional utilization is definitely possible, it doesn't actually criticizes the airline for the current setup. As it goes, it is very likely that a string of decisions made by AA which all had a deteriorating effect on utilization have at the same time all been beneficial toward attracting premium traffic and as such have likely had a positive effect on the airline's bottom line.

You will agree with me, however, that American's B772 utilization rates are staggeringly low for today's industry standards, for sure when the fleet size is taken into account. This case study turns out to be the epitome of an important element of airline management: finding an optimal balance between operational and commercial considerations. American's optimum seems to be swinging towards lower utilization and higher commercial interest. At the other end of the spectrum is clearly an airline like KLM, where utilization is maximized as the airline's first priority, because the airline is moving more and more away from attracting premium traffic and the compromises that need to be made in that respect. Case in point, KLM is one of the few airlines which operates its North South longhauls with immediate turnarounds and daylight sectors, which are perceived to be commercially less interesting.

Addressing finally your remarks regarding aircraft rotational data, I do have access to the actual aircraft rotations, and I have put in the flow charts the data according to the schedules, because that is how American turns out to be mostly organizing its operation. The data of the overnight ground stops and the aircraft chosen for that are accurate in >95% of the cases, while the other data on rotational flows are the most commonly appearing patterns. Let's not forget that American is scheduling extensive ground times and that operational irregularities have to be rather severe for the airline to be forced to dig into available operational flexibility or even operational improvisation.

In this regard, the greatest discrepancies between the flow charts in my models above and the actual rotations take place at airports with the greatest degree of operational freedom. They are, in order of decreasing flexibility LHR, DFW, JFK, ORD and MIA. When looking at that actual rotations at these airports, one can see that the airline has so many options there that a lot of variations are applied when it comes to rotating the fleet, and the data above are a mere illustration of what is possible. At other airports, where there is less operational flexibility, the aircraft turns are mostly as depicted in the flow charts above.

Let me finish by saying that I find AA's B772 Operation some of the most interesting research topic I have ever engaged in. It is a true case study of how things are not necessarily what they look like at the surface. I must say that, as a mathematician with a doctoral research domain in mathematical modeling pertaining to airline operational environment, the mathematical component of this research is challenging yet incredibly fascinating. In these days of cut throat competition in the airline industry, accurate mathematical decision models are a conditio sine qua non for efficiently running an airline.

Thank you again for taking the time to reply to my contribution. I am looking forward to engaging in further discussion.
 
albird87
Posts: 566
Joined: Mon Jul 10, 2006 7:15 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 9:04 pm

Wonderful HB-IWC!! A great read and also well put together!!

A couple of questions tho have sprung to mind although from reading it:

1) I travel through MIA on a regular basis and I have seen at the AA maintenance base there that there are some 777s in there from early morning till late at night. Now are these just small checks on the aircraft as they sit around for there evening departures?

2)

Quoting HB-IWC (Thread starter):
AA can keep this frame on the ground at LHR for several days without canceling a single flight and without other severe irregularities in its operational setup

I have been on flight 56/57 from MIA-LHR-MIA on a regular basis and as you have stated that flight out of LHR has been there overnight. My question is then why have i been on that flight soo often and it has been delayed as they say to "late inbound arrival of the aircraft!" if its been sitting there all night? now if there was a problem with the aircraft, as you have stated, this wouldnt cause too much trouble with the schedule as they have those 3 birds on overnight stops??

also I want to just know is that are there any more 777s coming for AA? I think they need some more and maybe expand there services to possibly more of the world!
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: AA B772 Operational Analysis

Thu Nov 30, 2006 10:56 pm

Quoting Kaitak744 (Reply 27):
HG-IWC just stated that there are currently 46 in active service with 1 spare.

Correct, typo, sorry.
 
gte439u
Posts: 357
Joined: Tue Nov 04, 2003 7:49 am

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 12:58 am

Quoting HB-IWC (Reply 35):
The above article is actually a small part of a much more extensive research topic, in which I am trying to set up a mathematical model that accurately quantifies a multi hub and spoke model as it used by American Airlines.

I've an O.R. background. Are you planning on publishing your work somewhere? I'd love to see what kind of models your build using this data.

By the way, awesome work. It's nice to see some thinking going on in this forum.
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 1:02 am

Quoting Jacobin777 (Reply 28):
In theory you might be correct..but last I remembered, AA has the largest MadDog fleet in the world and still making net profits...

And no large US airline other than B6 has a pure all new-generation fleet (the 717 fleet at FL could be argued to be either new generation or updated; I’ll go either way). The point is that every network carrier and most LFCs have large fleets of older generation aircraft in addition to their new generation fleets.

Also, what is not mentioned here is that AA has excess 777 capacity because it has tried to expand to Asia w/o success and has moved some of the 777s to S. America where utilization is not as good.

While you agree that AA doesn’t use its 777 fleet as aggressively as it could, DL, CO, and UA all use their 777s pretty aggressively when compared with AA. CO, DL, and UA all predominantly use the 777 for Asian flights w/ little if any usage to S. America. All of those airlines run very reliable international operations.

If AA knew where it would be right now with its 777s, it probably wouldn’t have quite as many as it does. AA was in a race with UA for size not too many years ago – even at the expense of profitability - and found the 777s to be an attractive plane particularly for developing Asia and for allowing AA to grow and have a competitive advantage on its marquee LHR and S. American routes. The 777 is the logical Boeing stepup from the 767 for 4000 NM flights but it is not the ideal aircraft for those routes.

It shouldn’t be a surprise that the only Airbus widebody that does fairly well is the A330 because it provides better economics for mid-range medium capacity int’l routes than any of Boeing’s offerings. It’s ironic that Boeing intends to fill that vulnerability to Airbus with the 787-9 and 10 while Airbus will not be as competitive as Boeing in the 787-8 sized market.

Overall this is a very good discussion that is possible only because of good in-depth analysis. I too would like to see far more business-oriented, data driven discussions on this forum.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 1:37 am

Quoting WorldTraveler (Reply 39):

Also, what is not mentioned here is that AA has excess 777 capacity because it has tried to expand to Asia w/o success and has moved some of the 777s to S. America where utilization is not as good.

That's incorrect..like all carriers, there are some routes which do well and some which dont'..

AA has been very successful to NRT from DFW, ORD, and recently, JFK.....

ORD-PVG has been an immediate success...something which AA wasn't anticipating....

ORD-NGO was actually a money maker (even after the loss of the Toyota contract to UA), as was NRT-TPE....however, they ended both routes because the 777's were needed on other routes....

Quoting WorldTraveler (Reply 39):

And no large US airline other than B6 has a pure all new-generation fleet (the 717 fleet at FL could be argued to be either new generation or updated; I’ll go either way). The point is that every network carrier and most LFCs have large fleets of older generation aircraft in addition to their new generation fleets.

That's my point..flying older generation planes doesn't equate to losing money....or losing against the competition...
"Up the Irons!"
 
PSU.DTW.SCE
Posts: 8747
Joined: Mon Jan 28, 2002 11:45 am

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 2:10 am

Good analysis.

However, as said, there isn't much else AA could, or would want to do to increase utilization of the 777 fleet in a cost-effective manner, or impact its premium schedule. They aren't going to fly around a 777 with an empty F or J class just so they can increase utilization by flying some domestic turns.

As you said, its the utilization of the South America flights that brings down the numbers. It would be interesting to compare these figures to something like NW who operated a dedicated fleet of aircraft for Trans-Pac, and Trans-Atl. For example, the A330-300's that fly exclusively to Europe (and MSP-HNL soon). They operate 2 flights a day, and they average 14-17 hours per day. That is the big difference there.
 
User avatar
lightsaber
Moderator
Posts: 22020
Joined: Wed Jan 19, 2005 10:55 pm

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 3:01 am

Quoting HB-IWC (Thread starter):
American Airlines B772 Network

When I have time, I'll search for more of your analysis.

Welcome to my RU list.

Lightsaber
6 months without TV. The best decision of my life.
 
HB-IWC
Topic Author
Posts: 4113
Joined: Fri Sep 22, 2000 1:09 am

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 11:55 am

Quoting PSU.DTW.SCE (Reply 41):
It would be interesting to compare these figures to something like NW who operated a dedicated fleet of aircraft for Trans-Pac, and Trans-Atl. For example, the A330-300's that fly exclusively to Europe (and MSP-HNL soon). They operate 2 flights a day, and they average 14-17 hours per day. That is the big difference there.

I have no doubt at all that utilization rates for Northwest's widebody fleet will feature considerably higher numbers than those of the AA B772 fleet. This is not only explained by the airline's lack of South American routes, which indeed tent to eat into utilization rates. American is also catering for the stability of its operation by including multiple operational spares at some of its operational hubs, while Northwest is not doing so. Further, American is typically keeping its aircraft on the ground for longer periods in order to provide its premium customers with commercially interesting schedules, while Northwest probably sees less of a need to do so because the airline caters much less for premium traffic as indicated by the NW latest widebody configuration, which show an ever dwindling number of premium seats.

Comparing airlines like American and Northwest offers one an interesting insight in the different approaches of different airlines in creating an optimal balance between operational and commercial interest. An airline like American, with its strong emphasis on attracting premium traffic at premium airports quite obviously takes a different stand in this matter than an airline like Northwest, which is much less geared to premium traffic. Finding an optimal balance in utilization rates so as to have an optimum return in the company's bottom line is a difficult balancing act between several parameters.
 
AJMIA
Posts: 434
Joined: Wed Dec 14, 2005 11:29 pm

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 12:38 pm

Quoting HB-IWC (Thread starter):
In order to somehow make good use of the parked airframes, American is operating a daily LAX roundtrip with its B772 aircraft. Otherwise the aircraft would anyway just be sitting in MIA. The airline has the operational potential to operate other such domestic or regional roundtrip, but apparently does not find any beneficial use for doing so.

The MIA-LAX 777 in the morning is doing really well. I imagine the second 777 could work on MIA-SFO. That flight is always full, and it would free up a 757 or 767 (depending on the season) for another flight.

AJMIA
Lady it's a jet... not a kite.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 2:29 pm

Quoting AJMIA (Reply 44):
I imagine the second 777 could work on MIA-SFO. That flight is always full, and it would free up a 757 or 767 (depending on the season) for another flight.

Sending the AA 777-200ER would be a bit odd to SFO...with the removal of the SJC-NRT 777 route, I'm not even so sure if it would be worth to have a 777 crew base here in the Bay Area....
"Up the Irons!"
 
mandala499
Posts: 6600
Joined: Wed Aug 29, 2001 8:47 pm

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 3:58 pm

Quoting WorldTraveler (Reply 18):
finally, I know people here will argue with me but I still think the 777ER is an overweight and overcapable aircraft for most US to western Europe routes. The issue is not that AA makes money on its 777 Europe routes but that it could make more w/ a better matched aircraft and it could add more Asian routes if it replaced the 777 w/ a less capable aircraft where the 777ER's capabilities are not needed. The 764 and A333 are roughly comparable in terms of seating capacity (+/- ~30 seats) to the 772 but weigh alot less. Even the 772 (non ER) is capable of doing most AA 777 flights to Europe and S. America (such as UA uses their 772s) but w/ less fuel burn due to the lower thrust engines. The 787-9 or 10 is the best candidate to replace AAs 777s in another 5-10 years, some of which could be used for additional Asian growth where the 777 is best suited in terms of weight and economics.

Diluting the costs.
If AA has the 772A and sends it for South America only, then the 772A could end up with an even lower utilisation rate than the remainder of the 772 fleet. Once that happens, it becomes a bigger resistance to the management to dilute that low utility costs to the rest of the 772 fleet. Having a 772ER only 772 fleet means they are forced to dilute that cost.

772 vs 772ER specific costs.
They have the same engines, the only difference is the thrust license plug. Hence for an equivalent weight of the aircraft. the ERs do not burn more. The only limitations here would be the TOW restrictions, which for a given route, leads to payload. Furthering this, a 772 non ER could have bigger payload penalty because of its lower MTOW AND lower max thrust limit (due to license, not actual engine physics) at hot and high situations.

So, using the ER and non ER would only have a cost difference in annual engine thrust license costs, nav and landing charges (due to the higher MTOW)... (I'm sure I've missed some). Now when comparing with the premium gains from equal config of aircraft, cargo revenue and flexibility, that cost would be negated largely. If you need 30 ERs and 70 Non-ERs, then it could be a different story, but we'd need to look at the 767 network as well.

Mandala499
When losing situational awareness, pray Cumulus Granitus isn't nearby !
 
baw716
Posts: 1463
Joined: Thu Nov 20, 2003 7:02 pm

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 5:04 pm

HB-IWC
First, congratulations. You have made a number of very smart decisions, the first of which is to provide enough information to make your argument while not giving too much information away. You also have managed to steer away from the cardinal sin of analysts: Analysis for analysis sake.

OK, now to your remarks:

You have managed to strike at the very heart of the issue that I have raised as a red flag for many years; that some airlines commercial philosophy is to focus solely on the high yield business traveler. While this strategy seems sound, it is built on a house of cards. No sensible business would focus the majority of its resources to attract only 6% of their passengers, yet this is exactly what the major airlines in the US have been doing for the past 10 years at least. This is a part of the reason that carriers outside of the USA have done better financially than US carriers over the past five years. It is not the principal reason, but it has seriously affected their ability to recover from the effects of the 2001 economic downturn and the aftermath of 9/11.

American has done a very effective job at staving off bankruptcy by getting their costs manageable while at the same time rationalizing their resources to attract those premium passengers which are absolutely vital to the success of carriers who have a structure like AA. I think, aside from CO who has done the best job of all the majors in surviving and actually growing these past few years (CO is the only US carrier that has actually grown in ASMs), AA has been successful at providing a stable product, which is the most critical choice criteria for business travelers.

You mention KLM as a different type of case study. KLM's situation is radically different from American and is probably as much an apple and orange comparison as you can achieve in this business. KLM's business is driven by connecting traffic through its Amsterdam hub. KLM does not have a home market anywhere near the size of AA. In fact, of all the major Euro carriers, I believe (I'd have to check the numbers to be sure), it has the smallest home market. This forces KLM to have a strategy that is driven to attract more volume (which as a single entity they were not able to do, but combined with AF...they have been able to achieve the economies necessary to make that business model profitable). They focus as much energy and resource on Economy as on premium traffic; they have been behind the curve in bringing their Business Class product up to industry standard, but have caught up and now, with the synergies they have created with AF a very strong competitor in Europe and a key player in SkyTeam.

There is so much more I could say about your comments; the point you raise about operational stability is one to which I could dedicate an entire post. Let me just state this one point: All US airlines are affected by vaguerities in weather; some more so than others. Hub geography has a great deal to do with this. If you look at where AA's hubs are located, the vast majority of them are in airports that are heavily affected by weather. In order to maintain a degree of operational stability as a result of weather, aircraft utilization has to suffer. The more flexibility a carrier has in its aircraft utilization, the less the carrier suffers as a result of an irregular operation. In other words, the better a carrier can move its pieces (crews and aircraft) around the board, the fewer flights that are cancelled and that has a direct effect on operational stability, let alone profitability.

I will close by saying that you have raised some very thought provoking questions and through your analysis and posts, have really struck at the heart of some of the issues that the industry faces at the moment. The question is, what are the lessons to be learned so the industry can get back on its feet in this country? You have started to identify some of the fine points and have presented them in a very cogent manner. You certainly have earned a place on my respected users list and I look forward to reading more of your work, as well as commenting on it.

Kind regards,
baw716
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
 
Rj111
Posts: 3007
Joined: Wed Sep 08, 2004 9:02 am

RE: AA B772 Operational Analysis

Fri Dec 01, 2006 11:52 pm

That's a very interesting post. Thanks for spending the time to compose it.

I welcome more!

Rj111
 
worldtraveler
Posts: 3417
Joined: Tue Aug 05, 2003 6:18 am

RE: AA B772 Operational Analysis

Sat Dec 02, 2006 1:34 am

mandala,
go back and read what I wrote. I am not proposing AA acquire 77As. I'm just saying if they had them, the 77As could do most of the routes the 77ERs fly. And yes, the As do burn slightly less fuel if for no other reason than that a more powerful engine weighs more.

Jacobin,
you can discuss whether a flight was profitable or not but if it had to be cxld it didn't meet the threshold of profitability AMR has set for the company.

I'm perfectly glad to see AA succeeding in Asia and China. But I have long said they could and probably should be exploring more opportunities in Asia than what they current serve or have announced. The whole point is that AA has a very competitive product, a large fleet of very capable 777s, and very good gateways. I find it hard to believe AA can't make ICN, TPE, or HKG work - all cities they could serve very quickly.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos